Shares in machinery manufacturer Milacron (Cincinnati, Ohio / USA; www.milacron.com) will no longer be traded on the New York Stock Exchange (NYSE). From 27 May 2008 they can be bought and sold only directly over the counter thanks to the company's weak share price resulting in a low market capitalisation. Despite the NYSE warning more than a year ago and a reverse stock split in May 2007, Milacron has not been able to lift its share price permanently. This means that the company is likely to find it even more difficult in future to drum up fresh capital.

The company’s performance has undoubtedly been affected by the worsening picture for plastics machinery producers on the North American market, which is currently characterised by the declining car manufacturing and construction industries, the resulting consolidation among converters and a surplus of second-hand machines.

The company’s three segments related to plastics processing together posted sales of just under USD 684m in 2007 (USD 703m in 2006) and the industrial fluids segment recorded sales of USD 124m (USD 118m). The total workforce currently stands at 3,300. Although the operating result was marginally better than in the previous year, the company still slipped deeper into the red. The net loss was USD 87m (USD 38m), including USD 12.5m one-off expenses for restructuring and USD 63m in connection with the controlling acquisition by Ohio Plastic.

Sales in Milacron’s "Machinery technologies North America" dipped to USD 367m (USD 402m) while EBIT declined to USD 10.8m (17.1m). "Machinery technologies Europe" performed significantly better with sales of USD 181m (153m) and an operating result of USD 3.3m (-USD 4.9m) – due among other things to the effect of the exchange rates, which, in sales alone, accounted for USD 15m. Under pressure from the situation in North America, the mould tooling segment was also weaker, with sales down from EUR 159m to EUR 148m. EBIT stood at USD 1.9m (USD 3m).

The company has recently taken a number of steps to restructure the organisation of its mould tooling business, including the formation of a strategic global alliance with the Japanese company Futaba (www.futaba.co.jp) and the sale of the German company DME Normalien (Lüdenscheid; www.dmeeu.com) to Matthias Rabenseifner. Consequently, Adolf Rabenseifner's former Reform Flachstahl acquired by Milacron in 2001 has returned to the family.

Geographically, Milacron generated 55% of its sales with plastics machinery in North America. Europe accounted for 28%, and Asia and the rest of the world for the remaining 17%. India was particularly strong, lifting sales by 46% to USD 12m. Total incoming orders were down by USD 3m compared with the previous year at USD 826m. The decline was tempered by the European plastics machinery segment, which recorded a significant rise in orders (USD 188m compared with USD 154m in 2006).

There will be further restructuring. According to its annual report, the company wants to further reduce its fixed costs during the course of 2008. It currently has debts of USD 261m. For the financing in Europe, a five-year credit agreement was concluded in March 2008 for EUR 27m. The money is going into Ferromatik Milacron (Malterdingen / Germany; www.ferromatik.com), D-M-E (Mechelen / Belgium; www.dmeco.com) and a company in the Industrial Fluids segment. However, the annual report states "The ability to service our debt and meet pension funding requirements depends upon...obtaining new sources of financing". Fresh money is thus still needed and this may be the target for the additional credit.

e-Service:
Milacron annual report 2007 with segments as a PDF document (1.446 KB)